Preston County Light & Power Co. v. Renick

• Citation: 145 W.Va. 115,113 S.E.2d 378
• Decision Date: 05 May 1960
• Docket Number: No. 12002,12002
• Parties: , 33 P.U.R.3d 321 PRESTON COUNTY LIGHT AND POWER COMPANY, a corporation, v. Myron R. RENICK et al., members, Public Service Commission of West Virginia, and Preston County Coke Company, a corporation.
• Court: Supreme Court of West Virginia

Page 378

113 S.E.2d 378

145 W.Va. 115, 33 P.U.R.3d 321

PRESTON COUNTY LIGHT AND POWER COMPANY, a corporation, v. Myron R. RENICK et al., members, Public Service Commission of West Virginia, and Preston County Coke Company a corporation.

No. 12002.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 20, 1960.

Decided March 8, 1960.

Rehearing Denied May 5, 1960.

Syllabus by the Court

1. A company which is primarily engaged in the production of coal and coke but also devotes certain facilities owned and operated by it in this State to the generation, sale and distribution of electricity to the general public for a period of several years, and subsequently transfers its transmission and distribution facilities to another company and after such transfer continues to devote the facilities owned and operated by it to the generation and sale of electricity for sale and distribution by the other company to the general public is, to the extent that it generates and sells the electricity which the other company sells and distributes to the general public, a public utility and, as such, is subject to the jurisdiction of the public service commission of this State.

2. The public service commission of this State has authority to supervise, regulate, modify or approve a contract between public utilities subject to its jurisdiction which affects the service rendered to the public or the rate charged for such service.

Blagg, Stone, Mauzy, Anderson & Bowles, A. G. Stone, Charles E. Anderson, Charleston, Daniel Gersen, New York City, for relator.

Steptoe & Johnson, Eugene G. Eason, Clarksburg, Steptoe & Johnson, W. F. Wunschel, Robert L. Stewart, Charleston, for respondents.

HAYMOND, Judge.

In this original proceeding in prohibition instituted in this Court on November 24, 1959, the petitioner, Preston County Light and Power Company, a corporation, herein referred to as 'power company,' seeks a writ to prohibit the defendants, Myron R. Renick, Hillis Townsend and Thaddeus D. Kauffelt, members of the Public Service Commission of West Virginia and that commission, and Preston County Coke Company, a corporation, herein referred to as 'coke company,' from proceeding further or asserting jurisdiction in a certain proceeding instituted by Preston County Coke Company, entitled Case No. 4913, now pending before the commission in which the appplicant seeks authority to establish rates and charges for the sale of electricity. The proceeding before the commission is based upon a petition in which the coke company alleges that the rates for electricity stipulated in an agreement between it as the seller and the power company as the buyer are inadequate and the purpose of that proceeding is the establishment by the commission of rates and charges set forth in the petition in lieu of rates and charges specified in the agreement between the coke company and the power company. By order entered by the commission on October 30, 1959 in the case now pending before it, the commission found that the coke company is a utility under the jurisdiction of the commission and directed that a hearing be held on December 10, 1959, for the purpose of affording the parties an opportunity to present evidence as to the reasonableness of the rates and charges which the coke company seeks permission to establish.

Upon the rule awarded by this Court returnable January 13, 1960, the defendants, Myron R. Renick, Hillis Townsend and Thaddeus D. Kauffelt, members, and the Public Service Commission of West Virginia, filed their demurrer and answer to the petition, the defendant, Preston County Coke Company, filed its demurrer and answer to the petition, and the petitioner filed its reply to the answer of Preston County Coke Company and its separate demurrers to the foregoing answers of the defendants. On January 20, 1960, this proceeding was submitted for decision upon the foregoing demurrers and pleadings and the written briefs and oral arguments in behalf of the respective parties.

The defendant coke company was incorporated in 1907 and in 1911 it began to sell electricity to the public generally in certain sections of Preston County and continued to do so until and during the year 1923. In November of that year the power company was incorporated and organized and the coke company subsequently transferred its facilities for the transmission and distribution of electric power in Preston County to the power company. Since the transfer the coke company has continued to generate electricity and to sell it to the power company for distribution to the public generally in Preston County by the power company and the power company as a public utility has furnished the electricity purchased by it from the coke company to the public generally in Preston County and is now engaged in that service.

For several years after its incorporation the power company was a subsidiary of the coke company. Later control of the power company was acquired by Preston County Supply Company, control of the coke company was obtained by the widow of Colonel H. C. Greer and control of Preston County Supply Company and the power company was acquired and is now exercised by her daughter and the sons of her daughter. For some time prior to the institution of this proceeding there has been no affiliation between the coke company and the power company and neither is an affiliate of the other. Since 1958, an undetermined legal controversy has existed between the two companies involving an alleged indebtedness by the power company to the coke company for electricity sold by the coke company to the power company.

The electric power generated by the coke company was sold by it to the power company under a verbal arrangement or agreement until December 1955 and on December 19, 1955, a written contract was entered into between the coke company and the power company which was amended by a subsequent written agreement of May 14, 1956, which specified the rates for the electricity furnished to the power company by the coke company.

The petition of the power company alleges that the coke company now furnishes electricity to no one except the power company and the answer of the coke company alleges that all the electricity furnished by the power company to its customers is supplied by the generating plant and other facilities of the coke company and that the only purchase of electricity from the coke company, other than the power company, is a company controlled by the widow of H. C. Greer which now operates the coal and coke producing properties formerly owned by the coke company.

In 1923 the coke company filed its application with the public service commission for permission to increase its rates and in that proceeding, entitled Case No. 1487, by order entered January 23, 1924, the requested rates were authorized and the order provided that 'The applicant, within a reasonable time, segregate its public utility electrical business from its coal and coke business and keep its books with respect to its utility business in accordance with the rules of the commission pertaining to such a utility.' The answer of the coke company also alleges that the power company instituted a proceeding against the Monongahela Power Company before the commission to prevent encroachment by that company upon the territory of the applicant in supplying service to Glauber Brass Company and that the foregoing proceeding was pending before the commission in December 1955 when the first written contract for the sale of electricity by the coke company to the power company was entered into on December 19, 1955.

After the entry of the order of January 23, 1924, which required the coke company to keep its books with respect to its electrical utility business in accordance with the rules of the commission, it does not appear that the commission has actually exercised any regulatory authority over the electrical business of the coke company or that the coke company has recognized or invoked the jurisdiction of the commission in connection with the generation and sale of electricity to the power company, but it does appear that the verbal and written agreements entered into by the coke company and the power company since January 23, 1924 for the sale of electricity produced by the coke company to the power company and the transfer by the coke company of its transmission and distribution facilities to the power company have not been approved by the commission. Though it is conceded that the power company purchases and receives from the coke company all the electricity which the power company as a public utility furnishes to its consumers in Preston County and that the coke company sells and furnishes to the power company, and has continued to do so since the year 1924, all the electricity produced by the coke company, except the electricity used by the coke company in the operation of its coal and coke producing properties and the electricity which it has sold to its successor for use in the operation of the coal and coke producing properties formerly owned and operated by the coke company, and though it appears that the coke company in furnishing electricity to the power company has owned, used and operated the same generating unit or plant, with such additions or replacements as may have been necessary, that it owned, used and operated in furnishing electricity to the public generally in Preston County as a public utility until it transferred its transmission and distribution facilities to the power company in 1924, the power company contends that the coke company is not a public utility and has not operated as a public utility or represented that it occupied the status of a public utility since it transferred its transmission and distribution facilities to the power company in 1924.

It is also conceded that prior to 1924 the coke company devoted its electrical generating facilities as well as its transmission...